Investor Quote of the Week

Quote Meaning

Peter Lynch’s quote means that when you buy a stock, you’re buying a small piece of a real business.

To make a smart investment, you should understand what that business actually does.

For example, let’s say you’re interested in buying shares of a company like Nike.

Instead of just looking at the stock price, take the time to learn about Nike’s business: they make sports apparel, shoes, and sponsor athletes.

If you know they’re releasing a popular new shoe line or expanding to new markets, that could be a reason to believe the company will do well in the future.

In other words, don’t just buy stocks because they’re going up or down.

Look at what the company actually does and the business behind the stock price.

Nugget of Wisdom

You can’t predict market tops.

We’re at all-time highs in the US markets, with the S&P 500 fresh off making the latest high ever on record.

Now that the “Trump trades” are in full force, it seems like the bull party isn’t going to end.

But things will have to normalize and come back down “to earth” eventually.

When will this happen?

We don’t know, and frankly, timing the market based on its latest top is usually a bad idea.

Markets can stay irrational a lot longer than most people can stay solvent, as the general saying goes.

So what should we do going forward?

Personally, I’d start taking some money off the table and rotating out to more defensive stocks that tend to do well during bear markets.

Names such as Walmart (ticker: WMT) or McDonald's (ticker: MCD) come to mind.

If you’re dollar-cost-averaging (DCA-ing) the S&P 500 index using exchange-traded funds (ETFs), I’d look at selling puts in the equivalent amount you want to buy at lower strike prices if you believe the market is “overvalued.”

That way you collect premium if the options expire worthless OR you get exercised at the price you want, and keep the premium of the put options too.

That’s just my opinion and not meant to be financial advice. That’s what I’d be doing personally.

Mistakes to Avoid

Don’t focus too much on short-term results and news.

Many investors check their portfolios frequently and react to every small market movement or headline, which can lead to impulsive decisions based on fear or excitement rather than logic.

For example, suppose there’s a sudden drop in the stock price of a company due to temporary news—like a product delay or a general market decline.

An investor focused only on the short-term might panic and sell, locking in losses.

But often, these temporary dips are just noise, and the stock could recover or even grow significantly over the long term if the company’s fundamentals are strong.

Successful investors tend to focus on the bigger picture and avoid reacting to short-term fluctuations.

This patience and perspective can help avoid unnecessary losses and capitalize on long-term growth.

Look at Apple below; it had its fair share of blunders in the past, but in the long run, the company performed extraordinarily well.

Stock of the Week

S&P Global Inc. (Ticker: SPGI)

Company Description

S&P Global, Inc. engages in the provision of transparent and independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide.

It operates through the following segments: Market Intelligence, Ratings, Commodity Insights, Mobility, Indices, and Engineering Solutions.

The company was founded by James H. McGraw and John A. Hill in 1917 and is headquartered in New York, NY.

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If you're serious and want to learn how to manage your own investment portfolios, this call covers the essential strategies and practices of investing, based on my 10+ years of real-world experience.

Here’s what we’ll discuss:

1. Portfolio Management: How I set up and balance my portfolio to reach my personal goals, adjusting to market changes.

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Talk soon,

Sam

Note: This is not financial advice—just insights from my 10+ years of investing.